Developer suing City of West Kelowna over infrastructure charges

Photo: Ironclad Developments

A developer is taking the City of West Kelowna to court over $750,000 in infrastructure charges the municipality forced upon the builder.

In a lawsuit filed Tuesday in BC Supreme Court, Ironclad Developments alleged the city did not follow policy when finalizing a latecomer agreement to fund the construction of Gosset Road between Eilliot and Brown roads

Latecomer agreements are used by municipalities to fund infrastructure required to support development. An initial developer pays for the costs of infrastructure improvements up front and subsequent developers who benefit from that work within 15 years must pay for a portion of the work in the form of latecomer fees.

In the case now before the courts, Ironclad Developments is disputing the $749,000 latecomer fee imposed by the city in relation to its four-building, 193-unit apartment project at 3623 Elliott Road.

The lawsuit alleges the fee was originally estimated to be $397,000, but it dramatically increased after cost increases associated with the construction of Gosset Road.

Ironclad claims the city did not give the company the chance to provide feedback on the costs associated with the new road, as outlined in city policy.

“Instead, after months of ignoring Ironclad’s requests to review relevant information and to make submissions, the city simply gave notice to Ironclad that it had delegated the matter to a quantity surveyor,” the lawsuit says.

The city would accept that surveyor’s conclusions and imposed the fee on Ironclad while tying its payment to the occupancy permit for the project’s first building.

On Nov. 20, 2020, the city told Ironclad that the fee amount was final and invited the company to go to court if it wanted to dispute it further. The company paid the fee, under protest, 10 days later.

“Ironclad submits that the process by which the city made the decision — including without input from the only latecomer and in absence of review by an independent third party engineer — was unreasonable,” the lawsuit claims.

The company is seeking an order that the $749,000 latecomer fee be returned and that the city reconsider the charge and explain its decision in writing with documentation.

None of the allegations contained in the lawsuit have been proven and the City of West Kelowna has not filed a response in court.